Reuters reports Wednesday morning, citing unnamed sources familiar with the matter, that Chinese electric vehicle maker, Nio Inc. (NYSE:NIO) is considering building a dealer network in Europe to speed up sales growth in the market.
Nio debuted in Norway in 2021 before expanding to Germany, the Netherlands, Sweden, and Denmark in October last year. This expansion enabled direct purchases through physical stores or online platforms, as well as flexible car leasing options starting from as short as a month.
However, two of Reuter’s unnamed sources revealed that the company has initiated an evaluation of dealers in crucial European markets, following the recent statement by the company's president about the underwhelming performance of European sales.
The move aligns with the aggressive expansion efforts of Chinese EV manufacturers such as XPeng (NYSE:XPEV), Zeekr, and BYD (SZ:002594) in the European market, where they can command higher prices for their vehicles compared to their increasingly saturated domestic market.
One of the sources said that Nio found that Europe had “peculiarities,” without elaborating. They also revealed that the company is strategizing to extend its presence into additional European nations.
According to posts on LinkedIn, Nio has been actively recruiting in France, Italy, Hungary, Switzerland, and Austria.
Another source revealed that dealerships were under consideration for both Nio-branded vehicles sold in Europe and the upcoming "Firefly" project, a new line of more cost-effective electric vehicles that the company intends to introduce to the European market starting in 2025.
Nio has asserted that there have been no changes to the marketing and sales approaches for its brand in Europe and that the company is dedicated to establishing a direct sales network.
"We will choose the model that best suits the local market and the brand's development needs," Nio said in an emailed statement.
As of the end of September, Nio had a total of 137 Nio Houses in operation, with six of them situated in Europe.
Shares of NIO are down 0.94% in pre-market trading Wednesday morning.